Oil prices fell after Beijing’s warnings of an increase in Corona cases

Oil prices fell more than $2 on Monday after rising COVID-19 infections in the Chinese capital, Beijing, dashed hopes of a rapid increase in China’s demand for fuel, while concerns about global inflation and economic growth further depressed the market.

Brent crude futures fell $1.81, or 1.48 percent, to $119.95 a barrel while US West Texas Intermediate crude recorded $118.81 a barrel, down $1.86, or 1.54 percent. Both futures contracts fell more than two dollars earlier in the session.

Prices fell after Chinese officials warned on Sunday of a “vicious” outbreak of COVID-19 in the capital and announced plans to conduct mass testing in Beijing until Wednesday.

Fears of an interest rate hike after a sharp rise in US inflation data on Friday also put pressure on global financial markets.

“Fears of a stronger dollar and stagflation have proven to limit the market’s upward trend,” Stephen Innes of SBI Asset Management said in a note.

“China still represents the significant near-term downside risk to the market, but most view the gradual normalization of Chinese demand as a strong positive for oil, despite the hype about a possible shutdown in the coming weeks because the current demand does not largely reflect normal conditions.” “.

Both world oil benchmarks rose more than one percent last week after data showed strong demand for oil in the United States, the world’s largest oil consumer, despite inflation fears and hope that consumption may rise in China, the world’s second-largest oil consumer. globally, after lifting the closure measures from the first of June.